General Findings
Manufacturers around the world, especially those in traditional, mature markets are facing a harsh reality–they are managing indirect sales channels based on outdated channel programs. When did you last review your channel programs? Market Strategy
When most manufacturers think of channel programs, the focus immediately turns to economics; the channel pricing structure and other elements of the economic relationship with your channel partners. Most manufacturers have done a good job of keeping their channel pricing current with the channel strategy. However, your channel programs go well beyond the economics—they impact virtually every element of your channel relationships.
Q. What is a channel program?
The most actionable definition of a channel program includes all the formal written and stated elements of your channel relationship. The program goes well beyond just a contract or a pricing structure—it defines all aspects of your relationship with the channel. As such, the program becomes the “recipe book” from which to manage your channel relationships.
Q. What are the components of a successful channel program?
The components of your channel program will be unique based on the needs of your target end user and the role you’d like your channels to play in meeting those needs. However, our experience shows that the most effective programs share a broad set of common elements. Envision your channel program as a series of “chapters.”
Agreement
This chapter defines, in general terms, the conditions under which you and your channel partner agree to do business together:
• The contractual agreement of a defined scope and time frame;
• The general definition of channel responsibilities;
° A statement of your distribution policy; are you going to offer your distributor exclusivity? Will you have multiple channels serving a defined geography or market segment?
• An outline of the process for review of the relationship, business planning goal setting and forecasting;
• A basis for termination of the relationship
Pricing/Economics
The purpose of this paper is not to explore the nuances of a channel pricing structure. However, a section of your channel program should outline in detail that economic relationship. All program elements that affect how money changes hands between you and the channel are captured here.
Sales/Marketing
It is critical that you tailor this chapter to the needs of your target end user. The reason you have authorized a channel partner is to help acquire and retain your customers, and this section of your program outlines in detail what you expect of your channel to do so.
Technical
This is particularly important if your channel participates in a technical selling scenario or adds technical value-add on your behalf; spelling out the technical elements of your channel relationship helps ensure the consistency of support to your end user
Operations/Logistics
This section of your channel program focuses on the efficiency of your relationship with your channel by outlining policies and procedures that allow you and your channel partner to fulfill the order at lowest possible cost. This area is the one that should be most often updated to assure your policies keep up with changing technology that allows for efficient operations.
Q. Why is it important to offer the channel a current and effective program?
In two words, “mind share” – an effective channel program can keep you “top of mind” to your channel partner by providing a range of benefits in the relationship. Sales Channel Workshops
A channel program sets the ground rules for your channel relationship; expectations are clearly spelled out across all functions of the channel’s business. Just as importantly, you set expectations for what the channel can expect of you in each of these functional areas. Obviously, this puts a spotlight on your performance, or lack thereof, in living up to these promises.
Q. How effective is your channel program today?
Frank Lynn & Associates has created a simple audit process Distribution Audit to measure the relative effectiveness of your channel programs. Based on our extensive experience in this area, the audit will provide you guidance in a number of areas:
• How effective is your program?
• What elements appear to be particularly effective? Or ineffective?
• For what elements of your program should you consider changes? And why?
To discuss this audit or to explore issues related to your channel programs in more detail, please contact Karl Edmunds at (312) 558-4866 or kedmunds@franklynn.com
Tags: Business, Distribution, management, Sales, Strategy
Posted in Business · March 12th, 2010 · Comments (0)
The goal of every marketing and sales organization is to consistently articulate unique, compelling and credible messages to their customers throughout the sales process. Market Strategy
While companies use both “air cover” such as advertising and “ground cover” such as field-based salespeople to deliver their messages, studies have shown that up to 85% of a company’s brand image and the purchase decisions of their customers are determined by the direct interaction between salespeople and target buyers
Unfortunately, none of the stakeholders are happy with the interactions:
• Target customers—of executives that take regular meetings with sales reps, more than 80% say the reps are unprepared, at least 70% simply “talk product” and know little about their business
• Marketing and sales management—less than 25% of CMOs and senior sales executives are satisfied that their sales teams can accurately and consistently communicate targeted messages to their customers
• Salespeople—salespeople spend up to 40% of their time creating presentations, customizing messaging and getting ready to interact with customers ; they use only 20%-50% of the materials created for them by marketing ; and only 10%-20% of salespeople are creating the “best” message for their prospects.
The job of front-line salespeople is not getting any easier. A recent study by IDC found that sales cycles have increased 24% and the number of decision makers involved has increased to seven.
Salespeople and marketing and sales management need a tool that:
• Connects salespeople with the best content, peer insight and subject matter experts (“sales assets”) for each specific selling situation
• Enables salespeople to intuitively access the best sales assets on-demand
• Promotes the most appropriate content to the salespeople and allows them to personalize it while reinforcing the brand
• Enables marketers to develop messaging and sales assets that salespeople actually use by ensuring they are aligned with the way salespeople really sell
• Allows subject matter experts to publish and promote their knowledge, content and insight without duplicating their efforts with every salesperson
• Allows marketing and sales management to see how the sales assets are actually used and get feedback on the quality, relevance and effectiveness of them from the sales team Sales Tool
In essence, marketing and sales teams need to harness the collective genius of their organizations and make it easily accessible to every frontline sales resource.
The field of “sales enablement” has emerged to fill this gap in marketing and sales, and a Chicago-based firm, SAVO Group, has distinguished itself with its award-winning on-demand application.
Frank Lynn & Associates has partnered with SAVO Group to extend the application to organizations whose sales coverage models include indirect sales channels such as consultants, system integrators, VARs, manufacturer’s representatives, dealers and distributors.
Organizations that leverage indirect sales channels in complex, consultative sales situations benefit greatly from the use of sales enablement tools. FL&A and SAVO work with clients whose sales coverage models include indirect sales channels to:
• Define and document the client’s sales strategy (e.g., target markets, key sales situations, value propositions, sales processes)
• Map the indirect sales channels to the sales strategy
• Align sales assets with the key sales situations and selling processes
• Configure SAVO’s application software to enable the channel’s sales processes
We invite you to learn more about sales enablement and how FL&A and SAVO can help you use it to enhance the performance of your direct and indirect sales teams. You are welcome to contact Jim Fogarty at 312/558-4803 or jfogarty@franklynn.com.
Tags: Business, Distribution, management, Sales, Strategy
Posted in Business · March 11th, 2010 · Comments (0)